Friday, July 30, 2010

The price of a recall

Not to dwell on the topic, but the recent Kellogg's recall has hit the company's bottom line. Second quarter financial results reveal a 15 percent drop in profits. Their stock price dropped over 4% as a result of the news.

Kellogg is certainly to recover eventually from this costs associated with this recall. The bigger question is how long it will take to restore consumer confidence, especially since they were less than forthright in fully explaining the causes behind the recall.

Source: AP

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